[HN Gopher] OpenAI closes funding round at an $852B valuation
___________________________________________________________________
OpenAI closes funding round at an $852B valuation
https://openai.com/index/accelerating-the-next-phase-ai
Author : surprisetalk
Score : 236 points
Date : 2026-03-31 20:07 UTC (2 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| podgietaru wrote:
| "This is not just product simplification. It is a distribution
| and deployment strategy."
|
| I am so sick of AI writing.
| alex_duf wrote:
| corporate speech existed long before AI
| EdNutting wrote:
| Mmm, it's almost like OpenAI built statistical models using
| pre-existing corporate speech as the target data... ;)
| baal80spam wrote:
| Get used to it. All PR statements nowadays get AI treatment
| before going public.
| verbify wrote:
| The snowclone is annoying, but comparisons are sometimes
| necessary. The problem here is the actual content is sloppy.
| rvz wrote:
| No mention of "AGI" this time. Since we all knew it was a scam.
| But this is the most damning of them all:
|
| > The OpenAI flywheel is simple. More compute drives more
| intelligent models. More intelligent models drive better
| products. Better products drive faster adoption, more revenue and
| more cashflow.
|
| FTX had a "flywheel". It fell off. Being saddled with hundreds of
| billions of debt makes this situation ten times worse.
| aanet wrote:
| > The OpenAI flywheel is simple. More compute drives more
| intelligent models. More intelligent models drive better
| products. Better products drive faster adoption, more revenue and
| more cashflow. That gives us the ability to reinvest and deliver
| intelligence more efficiently to consumers, enterprises, and
| builders around the world.
|
| -x-
|
| In short, the musical chairs are still playing... Keep on walkin'
| round, y'all, till the music stops.
|
| /s
| nemo1618 wrote:
| I'm old enough to remember when companies worth $1 billion were
| called "unicorns." Now we have a company _raising_ 122 times
| that? Valued at nearly 1000 times that...?
|
| At least they're throwing consumers a bone via the ARK deal. It's
| crazy how little AI exposure is available to anyone who isn't
| already wealthy and/or connected.
| nine_k wrote:
| I think this is reality-distortion field rivaling that of
| Jobs', and a crisis of faith. Nobody apparently believes that
| capital is worth investing into anything but AI.
| randomNumber7 wrote:
| > Nobody apparently believes that capital is worth investing
| into anything but AI.
|
| This is the main reason we see this insane investment into AI
| imo. If you imagine having lots of money, where should you
| invest that currently?
|
| Housing market: Seems very overvalued (at least in germany).
| Also with the current uncertainty and inflation its hard to
| make an investment that pays back over 20-30 years. So
| building is also difficult.
|
| Stocks are very volatile currently. Not only since Iran. To
| me it seems since the financial crisis 2008 investors don't
| enjoy stocks as before.
|
| Gold: Only if you are paranoid about collapse of society. It
| doesn't make sense to invest into s.th. without interest
| rates.
|
| Crypto: Same as gold, but better if you like gamling. I would
| assume most people who are very rich don't gamble with most
| of their fortune.
| nine_k wrote:
| Looking around, and especially forward, it would be
| military tech, e.g. [1], and its supply chain, e.g. [2] :-\
| Valuations are not as crazy, but I bet there'll going to be
| a lot of demand in the coming decade, unfortunately.
|
| Chip production, too, of course, but it's overflowing with
| money already, apparently. It's growing though, because
| there are real actual _shortages_ of stuff like RAM and
| SSDs, there 's money to be made immediately if you can.
| Chinese RAM manufacturers are building out like crazy.
|
| [1]: https://www.ultimamarkets.com/academy/anduril-stock-
| price-ho...
|
| [2]:
| https://www.marketscreener.com/quote/stock/RHEINMETALL-
| AG-43...
| teeray wrote:
| > Looking around, and especially forward, it would be
| military tech, e.g. [1], and its supply chain, e.g. [2]
|
| Only viable if you're okay with the ethical implications
| of funding war.
| nine_k wrote:
| Would you be fine with the ethical implications of
| funding the industry to fight WWII? Would you consider
| funding Ukrainian military unethical? Or Taiwanese?
|
| This is, sadly, not theoretical, and I'm afraid we'll
| soon see more of such choices, not fewer.
| zer00eyz wrote:
| > it would be military tech
|
| Anduril is the only company in this sector in the US that
| has any promise and they aren't even public. Most of us
| are not going to get our hands on this.
|
| Traditional defense sector looks more like Jeep, or
| Kodak...
| lotsofpulp wrote:
| > Stocks are very volatile currently. Not only since Iran.
| To me it seems since the financial crisis 2008 investors
| don't enjoy stocks as before.
|
| These returns do not qualify as "enjoying stocks"?
|
| https://investor.vanguard.com/investment-
| products/etfs/profi...
|
| The returns are higher than before 2008, the previous 15
| years are unprecedented.
|
| https://www.macrotrends.net/2526/sp-500-historical-annual-
| re...
| triceratops wrote:
| > To me it seems since the financial crisis 2008 investors
| don't enjoy stocks as before
|
| Maybe in Europe. The US stock market has nearly tripled
| since then. Literally the best period of stock growth in
| history.
| jacquesm wrote:
| "The Roaring Twenties roared loudest and longest on the
| New York Stock Exchange. Share prices rose to
| unprecedented heights. The Dow Jones Industrial Average
| increased six-fold from sixty-three in August 1921 to 381
| in September 1929. After prices peaked, economist Irving
| Fisher proclaimed, "stock prices have reached 'what looks
| like a permanently high plateau.'"
|
| https://www.federalreservehistory.org/essays/stock-
| market-cr...
| triceratops wrote:
| Ok second best :-) I wasn't alive in the 1920s though
| jacquesm wrote:
| True, but it is close enough in time that we should heed
| the lessons learned lest we repeat the experience.
| roncesvalles wrote:
| It's the result of too much echo chambered bullshit floating
| around daily about how capable LLMs really are. It's
| literally crypto/blockchain all over again. It's one big lie
| that a lot of people have bought into which causes it to
| self-perpetuate, like religion.
| bandrami wrote:
| But they're really cagey about actually handing money over to
| them today
| dlev_pika wrote:
| I wonder what is not getting invested in bc AI has been
| crowding out everything else since 22.
|
| It has to be brutal out there for everybody else, if all the
| money is going to AI.
| gavinray wrote:
| > At least they're throwing consumers a bone via the ARK deal.
|
| I had to look this up. There's a venture fund you can invest in
| with as little as $500 as a consumer -- though it's limited to
| quarterly withdrawals.
|
| https://www.ark-funds.com/funds/arkvx
|
| The fund is invested in most of the hot tech companies.
| rvz wrote:
| > At least they're throwing consumers a bone via the ARK deal.
| It's crazy how little AI exposure is available to anyone who
| isn't already wealthy and/or connected.
|
| It is deliberate. Period.
|
| It's always been known that you make money in the private
| markets and pre-IPO companies and retail is the final exit for
| insiders and early investors.
|
| Retail is not allowed to be early into these companies (Because
| that would ruin the point of being an insider) and this
| "exposure" has to be at the near top.
| monkeydust wrote:
| There are ways now for retail to get in to these companies
| including, check out hiive or equityzen...just beware of
| massive dilution.
| lotsofpulp wrote:
| Who are "these" companies? Did retail get into Google,
| Facebook, Amazon, Tesla, etc before the top?
|
| Also, aren't AI businesses losing a lot of money each year?
| Pretty sure there is some risk involved that is not good for
| retail.
| chilipepperhott wrote:
| I would not call an effective 2.9% expense ratio "throwing a
| bone".
| munk-a wrote:
| Also, the valuation for such a debt laden company should be
| viewed with great skepticism. I'm afraid a lot of mutual
| funds will end up holding the bags.
| a13n wrote:
| VCX (Fundrise) has way more exposure than ARKVX
| carlosjobim wrote:
| The money is worth much much less than it was before, we live
| in times of global hyper inflation.
| _diyar wrote:
| Are there any Polymarket / Kalshi bets on the over-under for the
| price? I wonder when the music will stop.
| tfehring wrote:
| https://polymarket.com/event/openai-ipo-closing-market-cap-a...
| aurareturn wrote:
| I don't gamble but if I did, I'd bet a lot on $1.6t.
| brcmthrowaway wrote:
| Wow. I doubt Anthropic can raise that. Are they more efficient,
| can they do with less?
| strongpigeon wrote:
| Given how all of Big Tech (except Google obviously) is going
| all in on Claude Code, I wouldn't be surprised if Anthropic
| becomes profitable first.
| rvz wrote:
| Anthropic doesn't have anything else other than the Claude
| models.
|
| But notice that _no-one_ , not a single mention of Deepseek
| tells me that they are preparing to scare everyone again. Which
| is why Dario continues to scare-monger on local models.
|
| Sometimes you do not need hundreds of billions of dollars for
| inference when it can be done locally with efficient software;
| and Google proved that. But where is the money in that? So
| continues the flawed belief in infinitely buying GPUs to scale
| which Nvidia needs you to do.
|
| Only a matter of time for local models to reach Opus level. We
| are 1 or at most 2 years behind that and Anthropic knows that.
| p12tic wrote:
| > Only a matter of time for local models to reach Opus level.
| We are 1 or at most 2 years behind that and Anthropic knows
| that.
|
| Can confirm. Kimi K2.5 is pretty intelligent and most of the
| time there's no difference between Opus and Kimi.
| randomNumber7 wrote:
| Local models just make no economic sense since the GPU will
| idle 99% of the time.
| zozbot234 wrote:
| You have a GPU already (at least an iGPU and an NPU on most
| newer platforms) as part of your computer, might as well
| get some use out of it with local inference. And trying to
| do inference on a larger model with an undersized GPU will
| have you idling a lot less than 99% - but that still makes
| a lot of sense for most casual users who will only rarely
| need a genuine "Pro" class answer from AI. Doing that
| locally is way less hassle than paying for a subscription
| or messing with API spend.
| railgunmerlin wrote:
| didn't they just raise last month?
| ares623 wrote:
| I think that runway has run out /s
| strongpigeon wrote:
| This has to be just an extension of their previous raise, right?
| This was a month ago: https://openai.com/index/scaling-ai-for-
| everyone/
| ricardobeat wrote:
| Doesn't look like it, that previous round was entirely Softbank
| + Nvidia + Amazon, while this one is VC + private investors.
|
| The valuation seems odd though, you'd expect $840B post-money
| from that earlier round?
| babelfish wrote:
| Maybe? Previous valuation is $730B + $122B raised in this
| announcement = $852B valuation in this announcement (no actual
| increase in valuation)
| strongpigeon wrote:
| Previous was $730B _pre_ money. This one is $852B _post_
| money. So yeah it 's the same one. Good catch.
| ta988 wrote:
| yup and begging for retailers money.
| podgietaru wrote:
| I can't help but think building an "everything" app is so.. both
| unbelievably ambitious, and a folly. I am not personally
| convinced that people want all the things that this super app
| purports to do.
|
| I am from a generation that still sits behind a desktop computer
| when making "big purchases." I can't even buy a flight on my
| phone. I am so much less likely to want to have an AI agent do
| that for me.
|
| Then the idea that daily consumption of these products will drive
| people to use them more at work... I have a very different life
| outside of work. My use of AI outside of work is exceedingly
| different to what I use it for at work.
|
| I sometimes feel wildly out of touch. But sometimes I view this
| as the VR moment. To me there are some things that I think may
| always be preferable to do outside of that ecosystem. And for me,
| a lot of tasks that 'agents' enable are small enough or important
| enough that I want to do them myself.
|
| I don't think I'll ever be comfortable allowing an agent to call
| me a taxi, or order food on my behalf. Because the convenience of
| asking for food isn't worth the chance it'll mess up, and opening
| an app and looking at a menu is simpler.
|
| I also think we're coming to a moment where we can start
| identifying the markers of AI generated content on sight. And I
| think there's a growing animosity to it. I might be comfortable
| asking AI something, but when I am looking for or searching for
| other content, seeing AI content markers make me angry at this
| point.
|
| To finish, I do just sort of straight up hate the idea that we're
| comparing this moment to the invention of electricity. It's on
| the face of it absurd.
| oidar wrote:
| >> To finish, I do just sort of straight up hate the idea that
| we're comparing this moment to the invention of electricity.
| It's on the face of it absurd.
|
| Do you feel that any technology is comparable in it's impact?
| EdNutting wrote:
| Most of modern medicine, by which I mean each discovery and
| invention in their own right, stand alongside electricity.
| Particularly vaccines.
|
| AI isn't there yet. You could turn off AI tomorrow and
| there'd be a shock but people would quickly switch back. You
| could not do the same for electricity, medicine, combustion
| engines (or steam engines/turbines), computers, the internet,
| modern building materials, etc. You try to swap back off any
| of those and the modern world (literally and figuratively)
| collapses. Turn off AI, and there'd be a financial collapse
| but afterwards everything would return relatively easily to
| an earlier way of doing things (ye know, the way from just 4
| years ago, and which is still 99% of how people do things :)
| )
| chuckadams wrote:
| I think the Internet is the more apt analogy. But even with
| electricity, you could have taken it away within the first
| couple decades of its popularity and society would have
| shrugged it off. Once they got used to that telegraph
| thing, not so much.
| EdNutting wrote:
| Yeah, I agree, but AI isn't there yet. It's too early to
| call it one way or the other. There's plenty else that's
| as important as electricity in my view, and maybe AI will
| join those ranks in 15 years or so when it's gone through
| the hype loop and when the economy has recovered from the
| now-basically-inevitable AI- and war-fueled turmoil of
| the next decade.
| rpdillon wrote:
| That's primarily a function of the time for adoption,
| though, not the utility of the technology. In 20 years,
| people would not be able to so easily say that they could
| turn off AI with no impact.
| EdNutting wrote:
| That..what..no. The question was whether there are any
| comparable to electricity, of which I have put forth a
| number of examples. And also offered my opinion that it
| is too early to judge whether AI will be as significant
| or not.
|
| There are loads of technologies that, despite being
| decades old, do not qualify. So, no, it's not "primarily
| a function of time". It absolutely is about the utility.
| We can only be in a position to judge utility when
| sufficient time has passed, and AI ain't had enough time
| yet to prove its utility. Given enough time, it might
| prove as useful as electricity, or it might just sit
| alongside computer operating systems - never quite making
| it onto anyone's "this changed the world" list, even if
| it has as much utility as an OS.
| jonah wrote:
| Sure, but compare this to "turn[ing] off" combustion
| engines a mere four years after commercial adoption rather
| than 162 years later (now). Back then, going back to horses
| wouldn't have been as big of a deal as it would be now.
| simianwords wrote:
| I think you lack imagination. This is going to be the future
| because it is legitimately a step up from the previous ways of
| doing things. I can do things that were way more difficult
| before.
|
| It doesn't have to be AI all the way - no one's asking AI to
| book things on its own and make the payments on their own. What
| does work is, make AI do the research and you verify and you do
| the payment. Human in the loop.
|
| To me this is clearly the future - AI has access to all the
| data sources and can translate your intent by accessing these
| tools in a loop and use intelligence to automate things.
| podgietaru wrote:
| Maybe there's a scenario where that is useful. But again, I
| don't know why I'd want an AI to do this research for me. I
| hop on Skyscanner. I type my location, and where I'd like to
| go. It presents me with a list of options, and I can then use
| the filters to find times that work best for me.
|
| I see a flight that isn't in my time frame, but is actually
| like 400 euros cheaper. And I decide in that moment that
| waking up at 5am is worth the savings.
|
| I'd have not typed that into a prompt. I made that decision
| at the moment I saw the possibility. I didn't even know that
| it was an option prior to that moment.
|
| Then I go look at hotels. I have a list of requirements, but
| I see that one of the hotels that I just glanced at has a
| really nice long pool, and the amenities look nicer from the
| images. I change my mind at that exact moment, I can walk 15
| minutes more to the beach.
|
| Now it should be even clearer why this is important for food.
| kace91 wrote:
| I've worked for 3 different startups where the CEO at one point
| gave us the talk of "we're building a super app".
|
| Admittedly openAI is in a better position to do it, but not by
| much.
|
| Everyone wants to be WeChat in china. No user wants that from
| them.
| dlev_pika wrote:
| _cries in Musk_
| try-working wrote:
| WeChat is not a super app. It's a browser. Tencent WeChat is
| the equivalent of Google Chrome.
| sixtyj wrote:
| > Within a year of launching ChatGPT, we reached $1B in revenue.
| By the end of 2024 we were generating $1B per quarter. We are now
| generating $2B in revenue per month.
|
| They raised $122B.
|
| 122 / 12*2 = 5 years to get your money back (I simplify, I know
| revenue <> profit)
|
| They are so big that almost no one can afford to acquire them. It
| is similar as someone would like to acquire MSFT or AAPL.
|
| WCGW?
| mrcwinn wrote:
| Correction: _no one_ can afford to acquire them.
| samdjstephens wrote:
| > The broad consumer reach of ChatGPT creates a powerful
| distribution channel into the workplace
|
| They mention this line in different forms a couple of times in
| the article. It's clear they're pretty rattled about Anthropic's
| momentum in enterprise, I wonder how confident they really are in
| this rationale.
| Ethee wrote:
| Kind of makes me wonder how 'accelerated' the timeline of
| publishing this article was based upon the Claude Code leak
| today. Considering everyone has gotten a sneak peek at what
| Anthropic is working on OpenAI might be a little worried. This
| could also just be coincidence, but this piece really does read
| like self-encouraging fluff.
| changoplatanero wrote:
| The timing of this coming out today is cause today is the
| last day of the month/quarter and has nothing to do with
| Claude.
| Ethee wrote:
| Ah, yeah that makes way more sense, I always forget about
| financial quarter timings.
| oulipo2 wrote:
| They are trying very hard to convince themselves that it's going
| to work, when we see all the models plateauing... it's clearly
| hitting the ceiling
| thomasahle wrote:
| I don't know anyway using these models everyday who think they
| are hitting a ceiling.
|
| If anything there's a plateau between each model release.
| kace91 wrote:
| I'm seeing diminishing returns, though in fairness we have no
| idea yet how to integrate properly with existing good
| practices and principles. I suspect improvement is going to
| come mainly from improved took usage rather than more
| impressive models.
| maipen wrote:
| I feel that too, every technology has its limits. I use AI
| daily. But I can't see the "intelligence". All I see is fine
| tuning and bigger datasets.
|
| Yesterday I asked claude to fix the color issues of graph. It
| failed miserably. Opus 4.6 wasn't able to figure out why the
| text was grey. It made something up, instead of realizing the
| problem was simple, oklch wrapped inside a hsl color.
| hsl(oklch(...)) I easily figured this out by just looking at
| the css and adding some logs to js.
|
| This is not intelligence. This is a tool that's smart. Not
| sentient. AGI won't be achieved by scaling alone.
| avaer wrote:
| This announcement completes the betrayal of their founding
| principles.
|
| "Our goal is to advance digital intelligence in the way that is
| most likely to benefit humanity as a whole, unconstrained by a
| need to generate financial return." - Not
| advancing digital intelligence - While locking people into
| a superapp - Because they are further constrained to
| generating financial returns
| ltbarcly3 wrote:
| They have to focus on the distant future (where they are frankly
| unlikely to exist) because they are falling further and further
| behind in the immediate future.
|
| Their latest desperate bid for relevance is a plugin for Claude
| Code that uses Codex as a second opinion. Please clap.
| nsingh2 wrote:
| This a big exaggeration. Codex is probably one of the top two
| LLM programming tools, along with Claude Code. GPT-5.4 models
| are strong, unlike the initial GPT-5 ones, which were
| comparatively bad, and can hold up against Opus 4.6. In my
| experience, they are better at analytical work.
|
| I cannot really see how they are "far behind," or how some
| plugin for Claude Code is a "last desperate bid." The tools are
| close enough to each other that I regularly use Codex one month
| and Claude Code the next without much disruption, just to try
| out any new models or features that might be available.
|
| I do not have much visibility into the non-code applications,
| so maybe it is stickier there.
|
| If/when the AI bubble pops and takes OpenAI down with it, I
| would not expect Anthropic to come out unscathed either.
| alyxya wrote:
| > Today, we closed our latest funding round with $122 billion in
| committed capital at a post money valuation of $852 billion.
|
| A couple things that stand out to me about this is the use of the
| phrase "committed capital", which only sounds like a promise that
| could break from various circumstances, and the valuation of
| their funding keeps changing so it sounds like a max rather than
| the valuation every investor invested at.
| snoren wrote:
| good catch! committed capital is not same as we raised.
| ta988 wrote:
| that's why they have to open through banks and other less
| valuable more sliced share system.
| strongpigeon wrote:
| I do wonder how much of Amazon's $50B share (per last press
| release) is in AWS credits rather than money in the bank.
| dheera wrote:
| Probably a lot? It would be much more tax-advantageous to do
| it this way, $50B worth of credits != $50B worth of spend on
| Amazon's part, and they might meet in the middle about how
| much equity that translates to.
| HWR_14 wrote:
| I can see a lot of advantages for Amazon, but I don't see
| why it would be tax-advantageous.
| qurren wrote:
| Situation A:
|
| You're Amazon. You give OpenAI $50B cash investment, they
| then hand you back the $50B because they buy $50B worth
| of Amazon AWS services (they would use AWS or other
| equivalent compute anyway). OpenAI pays an additional
| $1-5B in sales taxes. You have $25B opex, $25B profits,
| you pay 21% corporate taxes on the profits, so you too
| owe the government about $5B.
|
| Situation B:
|
| You're Amazon. You let OpenAI use your services by
| handing them API credentials that unlock what would
| normally cost $50B worth of services, but no money
| changes hands. You have zero revenue from the
| transaction, write off the $25B opex as a tax loss on
| your other profits elsewhere in the company. You pay $5B
| less tax on your other income as a company, and OpenAI
| also doesn't have to pay sales tax because they didn't
| actually purchase anything.
| cmiles8 wrote:
| To then claim that Trainium is "selling" and not a dud? I'd
| bet a lot.
| Aurornis wrote:
| That's typical. Large funding rounds usually aren't delivered
| as one single giant lump sum into the bank account. The capital
| is committed in stages that can depend on hitting milestones or
| goals.
|
| This is done even in smaller startup funding rounds some times.
| alyxya wrote:
| Fair, I think a lot of what I've been perceiving is the
| gymnastics in how funding and valuation and deals get
| reported. There ends up being a ton of asterisks that makes
| the headline news deviate quite significantly from reality,
| e.g. https://arstechnica.com/information-
| technology/2026/02/five-...
| whiplash451 wrote:
| It makes sense for such a huge amount to be "committed", not
| sitting idle in a bank somewhere.
| pmdr wrote:
| The only thing that's really accelerating is how fast you get
| rate-limited on ChatGPT.
| zozbot234 wrote:
| The big AI firms are all heavily compute-constrained, so that
| shouldn't be much of a surprise.
| mrdependable wrote:
| Funny how quickly they have become like every other tech company.
| There is basically no hint of OpenAI the non-profit anymore.
|
| Edit: Why did this go from their press release to a news story?
| joaohaas wrote:
| > This is not just product simplification. It is a distribution
| and deployment strategy.
|
| iykyk
| maxverse wrote:
| Are you suggesting this was written by AI?
| keybored wrote:
| It's not just a suggestion. It's a demonstration.
| simonreiff wrote:
| It's the demonstration layer
| wmf wrote:
| Why would they not use their own AI?
| dabbz wrote:
| It's a very frequently used structure by LLMs especially ones
| writing for LinkedIn.
| sunaookami wrote:
| You are absolutely right.
| rishabhaiover wrote:
| > We are now generating $2B in revenue per month
|
| What??
| ta988 wrote:
| Word on the street is that Anthropic is roughly at half that.
| Hard to know what they include and not, and what their real,
| non-subsidized costs are.
| rglullis wrote:
| They got a very sweet deal from the Pentagon, it seems.
| jsnell wrote:
| What what? Are you surprised it's that low, that high, that
| they can tell what their revenue is, that they report it on a
| monthly rather than annual basis, or something totally
| different?
|
| It's going to be pretty hard to get a good answer to whatever
| you're having difficulties understanding if you can't be
| bothered to write more than a word.
| snoren wrote:
| Money has lost all meaning in tech. 122 Billion raise! This is
| some kind of dream.
| h14h wrote:
| "Despite unprecedented capital investment in our R&D, our core
| product isn't getting meaningfully better so now we're building
| an app."
|
| Doesn't really strike me as the kind of statement that comes out
| of a company that can sustain a ~$1T market cap...
| 0gs wrote:
| isn't it weird that there is no attribution to a human here? i
| mean, eventually, they have to dropkick sama and install GPT
| itself as king, right? EOQ seems as good a time as any
| sidrag22 wrote:
| feels like an insult to readers to try to pretend that their
| revenue per month is comparable to google or apples growth when
| the funding is absurdly different, not to mention inflation
| itself.
|
| I am very much onboard with AI within my workflow. I just don't
| really see a future where openai/anthropic are the absolute front
| runners for devs though. Maybe OpenAI does just have the better
| vision by targeting the general public instead, and just
| competing to become the next google before google can just stay
| google?
|
| What is their next step to ensure local models never overtake
| them? If i could use opus 4.6 as a local model isntead and wrap
| it in someone else's cli tool, i 100% do it today. are the future
| model's gonna be so far beyond in capability that this sounds
| foolish? the top models are more than enough to keep up with my
| own features before i can think of more... so how do they stretch
| further than that?
|
| A side note i keep thinking about, how impossible is a world
| where open source base models are collectively trained similar to
| a proof of work style pool, and then smaller companies simply
| spin off their own finishing touches or whatever based on that
| base model? am i thinking of thinks too simplistically? is this
| not a possibility?
| thomasahle wrote:
| It's hard to train models in the open. All the big players are
| using lots of "dodgy" training data. Like books, video, code,
| destinations. If you did that in the open, the lawyers would
| shut you down.
| simonjgreen wrote:
| Anthropic is definitely gaining ground over OpenAI in the
| business world. Cowork is the absolute hotness right now, and
| even prompted MSFT to drop their own variant yesterday
| strongpigeon wrote:
| Ask anybody you know that works in Big Tech. They're all
| pushing _hard_ for Claude Code adoption.
| operatingthetan wrote:
| Codex and Gemini CLI seem 1-2 months behind Claude Code. They
| will catch up. This race will eventually be won by whoever
| can come up with the cheapest compute.
| a1studmuffin wrote:
| And that's a dangerous game because the cheaper compute
| gets, the more likely consumers are to self-host rather
| than pay a subscription.
| ds2df wrote:
| Apple could figure out a way to neatly package it into
| their ecosystem.
| winrid wrote:
| Not really. Most people won't self host.
| jonah wrote:
| The general public will self-host it's built in to your
| next phone or laptop straight out of the box or maybe
| from the App Store.
| winrid wrote:
| True. I was thinking more of power users. Do you think
| Opus level capabilities will run on your average laptop
| in a year? I think that's pretty far away if ever.
| ravenstine wrote:
| Though I think these companies are wildly overvalued, I don't
| see LLMs as a service going away in the future. The value in
| OpenAI is that it provides extra compute, data access, etc. My
| money is on local AI becoming more of a thing, while services
| like OpenAI still exist for local AIs to consult with. If a
| local model can somehow know that it's out of it's depth on a
| question/prompt, it can ask an OpenAI model if it's available,
| but otherwise still work locally if OpenAI fails to respond or
| goes out of business. To me that makes a lot more sense than
| the future being either-or.
| clhodapp wrote:
| Models not being able to reliably know if they are out of
| their depth is a foundational limitation of the currently
| generation of models, though.
|
| Best they can do is to somewhat reliably react to objective
| signals that they've failed at something (like test
| failures).
| mlsu wrote:
| You can host a website on any rackmount server for pennies
| compared to AWS. But people still use AWS.
|
| The market for local models is always gonna be a small niche,
| primarily for the paranoid.
| lukan wrote:
| "The market for local models is always gonna be a small
| niche, primarily for the paranoid."
|
| Have you ever heard of industrial espionage? Pr privacy
| regulations? Or military applications?
|
| (Also the US military runs claude as a local model)
| FpUser wrote:
| >"But people still use AWS"
|
| I do not, I self host. My current client is also got rid from
| AWS packing up nice savings as a result
| Aurornis wrote:
| > What is their next step to ensure local models never overtake
| them?
|
| As someone who experiments with local models a lot, I don't see
| this as a threat. Running LLMs on big server hardware will
| always be faster and higher quality than what we can fit on our
| laptops.
|
| Even in the future when there are open weight models that I can
| run on my laptop that match today's Opus, I would still be
| using a hosted variant for most work because it will be faster,
| higher quality, and not make my laptop or GPU turn into a
| furnace every time I run a query.
| zozbot234 wrote:
| If your laptop overheats when you push your GPU, you can buy
| purpose-built "gaming" laptops that are at least nominally
| intended to sustain those workloads with much better cooling.
| Of course, running your inference on a homelab platform
| deployed for that purpose, without the thermal constraints of
| a laptop, is also possible.
| Aurornis wrote:
| I didn't say it overheats. It gets hot and the fans blow,
| neither of which are enjoyable.
|
| MacBook Pro laptops are preferred over "gaming" laptops for
| LLM use because they have large unified memory with high
| bandwidth. No gaming laptop can give you as much high-
| bandwidth LLM memory as a MacBook Pro or an AMD Strix Halo
| integrated system. The discrete gaming GPUs are optimized
| for gaming with relatively smaller VRAM.
| miki123211 wrote:
| > how impossible is a world where open source base models are
| collectively trained similar to a proof of work style pool
|
| Current multi-GPU training setups assume much higher bandwidth
| (and lower latency) between the GPUs than you can get with an
| internet connection. Even cross-datacenter training isn't
| really practical.
|
| LLM training isn't embarrassingly parallel, not like crypto
| mining is for example. It's not like you can just add more
| nodes to the mix and magically get speedups. You can get a lot
| out of parallelism, certainly, but it's not as straightforward
| and requires work to fully utilize.
| synergy20 wrote:
| well we do need at least two powerful AI companies, so they can
| cross checkout each other when I use them.
| simonebrunozzi wrote:
| No, they didn't raise $122B as the HN title implies. A big chunk
| of that $122B is a "maybe" that depends on various things that
| need to happen in the future.
|
| Oh, man... I can't wait to see where this is going. Might not be
| pretty after all.
| Aurornis wrote:
| Having large funding rounds contingent on meeting milestones is
| common. Always has been.
| ares623 wrote:
| The assumption that's conveniently left out is that the
| milestones are realistic
| jmalicki wrote:
| It just makes comparing funding rounds hard to understand,
| since money in the bank is money in the bank, and a lot of
| the "committed capital if you reach a milestone" is capital
| that would be easy to get if you reached that milestone, if
| it is sufficiently advanced, and has enough outs, etc., that
| you may as well have just raised another round in the future.
| Aurornis wrote:
| That's logically inconsistent. If the company was
| performing poorly enough that they couldn't meet their
| funding milestones from a previous round, they're not going
| to have an easy time raising the same money in a future
| round.
|
| The milestones aren't a hard-stop that forbids the previous
| funding round participants from providing the money if they
| still choose. It's just an out.
| JohnMakin wrote:
| sure they can. that's the whole point of the "pivot"
| jmalicki wrote:
| What I am saying is that if you do meet the milestones
| from your previous round, you're going to have an easy
| time fundraising anyway, so funding contingent on
| milestones isn't that different than just saying "well,
| if we need more money we can do another round"
| Aurornis wrote:
| Fundraising rounds are difficult, laborious, and
| distracting. It would be extremely different to try to
| multiply the number of rounds by 3-5X. There's nothing
| easy about that.
|
| You're also ignoring that the market changes frequently.
| If you only raised as much money as you needed for the
| next 4-6 months with plans to re-raise all the time,
| you'd have to constantly be sizing your growth plans up
| or down based on how the market felt about startup
| investing that month.
|
| Imagine the company having to either do speed hiring or
| large layoffs every few months to adjust to the size of
| the fundraising round they were able to get this time
| around.
|
| Nothing about what you're suggesting would be easier, or
| easy at all
| nostrademons wrote:
| Note that even that "money in the bank" of traditional
| venture firm is not really money in the bank. VC, PE, and
| hedge fund managers usually don't have all the cash for the
| fund sitting in the bank at all times. Rather, their
| agreement with the LPs that fund the fund is structured as
| a series of capital calls: it gives the fund the _right_ to
| demand that their LPs deposit cash in their bank accounts
| within 10-30 days, which can then be used to fund the
| investments that the VC firm makes. The capital calls are
| backed by legal documents enforceable in court, with pretty
| stiff penalties for failing to meet a capital call.
|
| Such a funding structure here isn't all that different: the
| funding agreement gives OpenAI the right to call on their
| backers to make certain cash deposits, contingent upon
| milestones being met. Deep down inside, "money in the bank"
| doesn't actually exist, it's just mutual agreements backed
| by force of law.
| jmalicki wrote:
| When a startup raises money without contingencies,
| typically they do get a large amount of money in the bank
| all at once.
| Aurornis wrote:
| If investments are not tranched then the money is not
| delivered in tranches, yes.
|
| The first rule of tautology club is...
| wmf wrote:
| Why not announce the funding after the milestones have been
| met?
| apparent wrote:
| It's splashier this way, and is meant to shape the
| narrative, make other companies fear their warchest, and
| make hiring easier. Of course, those who are in-the-know
| won't be fooled, but the perception of the general public
| will be set in stone by the PR framing.
| Aurornis wrote:
| The funds are committed under the terms of the deal (share
| price, things like board seats, and other details). There
| are legal obligations to provide it.
|
| This is a common structure for large investments. It would
| be really inefficient for all of these investors and
| companies to have to have the money sitting in cash to do a
| deal and then transfer it into the company's bank where it
| sits and earns interest for years until they can deploy it.
|
| Even VC firms who raise funds work this way. The capital is
| "committed" but investors don't wire all of the money over
| right away so it can sit in the VC firm's bank accounts,
| waiting. The VCs do what's called a "capital call" through
| which they're legally bound to provide the money they
| committed when requested, under the terms of the deal.
| wesammikhail wrote:
| One of the stipulations is that OpenAI achieves "AGI"... Need
| I say more?
|
| Also a lot of this "money" is in cloud compute and credits
| not cash so...
| caycep wrote:
| that being said, how can Softbank keep throwing around all
| these astronomical numbers after so many bad investments?
| Leftover iPhone money?
| Analemma_ wrote:
| Saudi oil money
| MidnightRider39 wrote:
| Which might not be a thing anymore soon the way things are
| going...
| ds2df wrote:
| cant stop winning!
| bahmboo wrote:
| Other way around - the Saudis are making bank.
| outside1234 wrote:
| well, until the Iranians blow up their refineries.
| phillipcarter wrote:
| Most people know Softbank as the company who lost billions on
| WeWork and not the company who made several _more_ billions
| on the ARM IPO.
| caycep wrote:
| with these swings, I'm not sure how Son-san keeps himself
| from getting an ulcer
| dd8601fn wrote:
| At some point it must just be Monopoly money.
| jelling wrote:
| They borrowed $40B from JP Morgan. They literally did not
| have the money otherwise.
| lefty2 wrote:
| also they need to pay back that in one year, so if OpenAI
| don't IPO this year they are screwed
| roxolotl wrote:
| Was curious about the source here. Seems widely reported
| and I just missed it. This a unpaywalled source I found
|
| https://techcrunch.com/2026/03/27/why-softbanks-
| new-40b-loan...
| adventured wrote:
| Their ~$50 million total Alibaba investment turned into ~$70
| billion. As of two years ago they were still liquidating out
| of it.
|
| January 26, 2024 - "Japanese investment holding firm SoftBank
| Group Corp has largely cleared its ownership in e-commerce
| giant Alibaba Group Holding, concluding one of the most
| successful deals in China's internet industry and a holding
| that spanned about 23 years."
|
| "SoftBank, which invested US$20 million into Alibaba when it
| was still a start-up in 2000, said in a corporate filing on
| Thursday that it was set to book a gain of 1.26 trillion yen
| (US$8.5 billion) - about 425 times the value of its initial
| outlay - for the Tokyo-based firm's 2024 financial year after
| divesting its [remaining] shares via subsidiary Skybridge."
|
| https://finance.yahoo.com/news/japans-softbank-concludes-
| run...
| troupo wrote:
| "Here comes another bubble..."
| JohnMakin wrote:
| Don't let reality get in the way of _vibes_
| jredwards wrote:
| Seems like all of OpenAI's "deals" are announcement fodder with
| no real contract, primed to quietly fall through later.
| dang wrote:
| Ok, let's switch to the HTML doc title above.
| apparent wrote:
| I've wondered how many announced fundraising rounds were like
| this. It's in everyone's interest (VCs and entrepreneurs) if
| the message to the outside world is "this company is amazing so
| they've raised a boatload of cash". But VCs might not want to
| give it all up front, or unconditionally.
|
| It makes it hard to say what the valuation of a company is. If
| the milestones are unlikely to be hit, then it's anyone's
| guess.
| Aurornis wrote:
| This is a common structure. It's confusing to people who
| don't know finance or startups when they first see it.
|
| Even VCs don't get all of their fund money delivered into
| their bank account when they raise a funding round. It's
| inefficient and undesirable for everyone involved to have to
| move all of the money up-front, at once.
|
| If you talk to anyone in startup funding or finance they'll
| be familiar with the term "capital call" which describes how
| committed capital obligations are delivered at a later date
| than the initial deal:
| https://en.wikipedia.org/wiki/Capital_call
| johnebgd wrote:
| Gotta hit that high IRR as a fund manager and the clock
| starts when the cash comes in so capital calls are
| appreciated by fund managers. Unless they are emerging
| managers (the startup equivalent in finance) and their LP's
| are less than institutional and ghost them when the capital
| call hits.
| munk-a wrote:
| IRR is so trivial to manipulate - it'd be wonderful if
| more investors began demanding actual metrics on capital
| performance. If you're parking cash with an investment
| firm you want to know about how much of a return you can
| expect when it is withdrawn, and while history is a guide
| and not a guarantee, there are much better ways to inform
| that expected return than IRR. "My million got a return
| of 2% during a year when your reported IRR was 10% -
| where's the other 8%!" is a common cry from those who
| haven't just rolled over their investment, unaware of how
| little it has functionally appreciated.
| apparent wrote:
| I think more people are aware that VCs raise commitments
| for a fund that they can pull in via capital calls than are
| aware that startup funding from VCs come with hurdles to
| clear.
|
| This is perhaps because the most common round to raise is a
| small/early one, and these tend not to have hurdles.
| Founders that only ever raised these rounds wouldn't
| necessarily know what happens in later/bigger rounds.
|
| Also, I wonder if capital calls come with hurdles as well?
| That is, can an LP refuse to put in more money if the VC's
| recent investments have not done well? I would think not,
| since it typically takes many years to determine whether
| investments were good or not.
| pimlottc wrote:
| It's confusing because it's meant to be confusing. Bigger
| numbers are more impressive.
| hn_throwaway_99 wrote:
| I've been involved in many startups, and this type of
| fundraising is _not_ common, or at least it wasn 't common
| before a few years or so ago
|
| The whole concept of talking about "runway" is basically
| calculating how much cash in the bank, that is actually in
| your bank account, will last. And this arrangement is
| different, as there are contingencies. In the past, VCs
| would just give you money in a particular series, and then
| if your business did well, they'd eventually give you more
| money in a later series. But it wasn't like they announced
| it all up front in, say, a Series A, but a big chunk of the
| money would only be delivered if you met milestones.
| SilverElfin wrote:
| With NASDAQ and NYSE looking to reduce the timelines for new
| public companies to be included into indices ("fast entry"
| rule), I have a feeling that OpenAI and SpaceX and Anthropic
| are mostly looking to dump their inflated shares into the
| public's retirement accounts by force.
|
| Michael Burry called out this structural manipulation play
| recently:
|
| https://www.benzinga.com/markets/tech/26/03/51248353/michael...
| aurareturn wrote:
| $2b/month which is $24b/year. Not as much as I expected
| considering they were at $20b by end of 2025.[0] They only added
| $4b since?
|
| Anthropic had $19b by end of February 2026 and they added $6b in
| February alone.[1] This means if they added another $6b in March,
| they're higher than OpenAI already.
|
| However, I heard that OpenAI and Anthropic report revenue in a
| different way. OpenAI takes 20% of revenue from Azure sales and
| reports revenue on that 20%. Anthropic reports all revenue,
| including AWS's share.[2]
|
| [0]https://www.reuters.com/business/openai-cfo-says-
| annualized-...
|
| [1]https://finance.yahoo.com/news/anthropic-arr-
| surges-19-billi...
|
| [2]https://x.com/EthanChoi7/status/2036638459868385394
| troupo wrote:
| And that is revenue only. In the past 15 or so years most US
| companies (and especially startups) always talk about revenue
| only. Wheras only profit should matter.
|
| E.g. what good is 20 billion per year when "OpenAI is targeting
| roughly $600 billion in total compute spending through 2030".
| That is $150 billion per year?
| merlindru wrote:
| why should only profits matter? if i had a killer product
| today that i just need to sell tomorrow, wouldn't you still
| invest today knowing i'll probably only start to make money
| tomorrow (or perhaps next week)?
|
| the expectation is that they'll eventually make money. they
| can't raise forever. only startups are not profitable for a
| few years. but most companies that have existed for a long
| while have been profitable
|
| and since they're expected to make a LOT of money, everyone
| wants a piece of that future pie, pushing up the valuation
| and amount raised to admittedly somewhat delusional levels
| like here
| Barrin92 wrote:
| not if your product is selling two dollars for one dollar
| and as soon as you'll start to charge more I'll switch to
| one of your twenty competitors
|
| profit isn't a function of having a killer product, it's a
| function of having no competition
| ds2df wrote:
| no competition is a bit extreme. Limited competition yes
| due to competitive advantages.
| aurareturn wrote:
| And why do you think twenty competitors can stay
| competitive for years to come?
|
| Industries always consolidate and winners emerge. SOTA
| LLMs look like a natural monopoly or duopoly to me
| because the cost to train the next model keeps going up
| such that it won't make sense for 20 competitors to
| compete at the very high end.
|
| TSMC is a perfect example of this. Fab costs double every
| 4 years (Rock's Law). It's almost impossible to compete
| against TSMC because no one has the customer base to
| generate enough revenue to build the next generation of
| fabs - except those who are propped up by governments
| such as Intel and Rapidus. Samsung is basically the SK
| government.
|
| I don't see how companies can catch OpenAI or Anthropic
| without the strong revenue growth.
| outside1234 wrote:
| Google has completely caught OpenAI. Anthropic has a
| better coding model, but I'm sure Google is working on
| that too.
| bandrami wrote:
| > why should only profits matter?
|
| In this case because it's not clear that anybody has
| actually figured out how to sell inference for more than it
| costs
| Swizec wrote:
| > Wheras only profit should matter
|
| Profit is money you couldn't figure out how to spend. During
| growth, you want positive operating margins with nominal
| profits. When the company/market matures, you want pure
| profits because shareholders like money. If you can find a
| way to invest those profits in new areas of growth, that's
| better.
| aurareturn wrote:
| Not sure why you're downvoted.
|
| Everyone wants to treat OpenAI like a car wash business
| where they need to make a profit almost immediately. I
| don't know why people can't understand that the industry is
| in a rapid growth stage and investing the money is more
| important than making a profit now. The profits will come
| later.
| aurareturn wrote:
| It's not as much as you think. Google is spending $185b on
| data centers this year alone. Amazon is spending $200b this
| year. Total capex for big tech is ~$700b in 2026 and we're
| not including neo clouds, Chinese clouds, and other sovereign
| data centers.
|
| Since everyone is trying to get compute from anywhere they
| can, including OpenAI going to Google, it's hard to tell what
| is used internally vs externally.
|
| For example, it's entirely possible that Google's internal
| roadmap for Gemini sees it using $600b of compute through
| 2030 as well. In that case, OpenAI needs to match since
| compute is revenue.
| pier25 wrote:
| Give me a billion and I'll have 500M of revenue in no time by
| selling dollars at 50 cents.
| aurareturn wrote:
| Why are we treating OpenAI and Anthropic differently than
| say, Amazon or Uber? Both companies invested in growth for
| many years before making a profit. Most tech companies in
| the last 2-3 decades lost money for years before making a
| profit.
|
| Why are we saying that OpenAI and Anthropic can't do the
| same?
| hirako2000 wrote:
| Two reasons. They somewhat broke even, and kept getting
| investment. The potential for quasi monopoly was obvious.
|
| Openai can't claim either.
| aurareturn wrote:
| How did Uber somewhat break even? They lost $34b before
| making a profit.
|
| Uber was only on a path to monopoly in the US, not world
| wide. It's lost to local competitors in most countries.
| And it can get disrupted by self driving cars soon.
|
| OpenAI's SOTA LLM training smells like a natural monopoly
| or duopoly to me. The cost to train the smartest models
| keep increasing. Most competitors will bow out as they do
| not have the revenue to keep competing. You can already
| see this with a few labs looking for a niche instead of
| competing head on with Anthropic and OpenAI.
| vlovich123 wrote:
| The cost of copying SOTA models though is super cheap and
| doesn't take super long.
| aurareturn wrote:
| How do you distill when OpenAI and Anthropic inevitably
| move to tasks running in the cloud? IE. Go buy this
| extremely hard to get concert ticket for me.
|
| Distilling might only be effective in the chat bot
| dominant era. We are about to move to an agents era.
|
| Furthermore, I'm guessing distilling will get harder and
| harder. Claude Code leak shows some primitive anti
| distilling methods already. There's research showing that
| models know when it's being benchmarked. Who's to say
| Anthropic and OpenAI aren't able to detect when their
| models are being distilled?
| outside1234 wrote:
| Worse, Google can afford to outspend them in this game
| and basically run them both out of money.
| muzani wrote:
| The startup game is about building assets and then cashing
| out on them during exit.
|
| Assets are harder to measure. Facebook used to say something
| silly like every user was worth $100. That sounded ridiculous
| for a completely free app but over a decade later, the
| company is worth more than that. Revenue is an easier way of
| measuring assets than profit.
|
| Profit doesn't really matter. It gets taxed. But it's not
| about dodging taxes; it's because sitting on a pile of money
| is inefficient. They can hire people. They can buy hardware.
| They can give discounts to users with high CLTV. They can
| acquire instead of building. It's healthy to have profit
| close to $0, if not slightly negative. If revenues fall or
| costs increase, they can make up for the difference by just
| firing people or cutting unprofitable projects.
|
| Also when they're raising money, it makes absolutely no sense
| to be profitable. If they were profitable, why would they
| raise money? Just use the profits.
| maerF0x0 wrote:
| 30x revenues at 17% revenue growth is... aggressive.
| jsnell wrote:
| Except it's not 100x revenues, and it's not 17% growth. I
| don't know where you got those numbers from?
|
| The numbers OpenAI gave in the post would mean a 30x multiple
| pre-money. And the $20B -> $24B run-rate growth since the
| start of the year could plausibly mean anything from 110% to
| 200% annualized growth rate, depending on whether that
| happened over two or three months. The $24B is a lower bound
| as well, since they only gave use one significant digit for
| the monthly revenue.
| maerF0x0 wrote:
| You're right, I was thinking about 100x revenues and forgot
| to confirm the math. Updated to reflect your point. ChatGPT
| itself provided the 17% number (it's most recently
| available growth rate)...
| manquer wrote:
| They aren't reporting anything yet. What we hearing is just
| from news media who get their leaks/info from investors who get
| some form of IR reports/ presentation.
|
| Both will do public reporting only when they IPO[4] and have
| regulatory requirement to do so every quarter. For private
| companies[1] reporting to investors there are no fixed rules
| really[3]
|
| Even for public companies, there is fair amount of leeway on
| how GAAP[2]expects recognize revenue. The two ways you
| highlight is how you account for GMV- Gross Merchandise Value.
|
| The operating margin becomes very less so multiples on absolute
| revenue gets impacted when you consider GMV as revenue.
|
| For example if you consider GMV in revenue then AMZN only
| trades at ~3x ($2.25T/$~800B )to say MSFT($2.75T/$300B) and
| GOOG ($3.4T/$400B) who both trade at 9x their revenue.
|
| While roughly similar in maturity, size, growth potential and
| even large overlap of directly competing businesses, there is
| huge (3x / 9x) difference because AMZN's number includes with
| GMV in retail that GOOG and MSFT do not have in same size in
| theirs.
|
| ---
|
| [1] There are still a lot of rules reporting to IRS and other
| government entities, but that information we (and news media)
| get is from investors not leaks from government reporting -
| which would be typically be private and illegal to disclose to
| public.
|
| [2] And the Big 4 who sign off on the audit for companies
| prefer to account for it.
|
| [3] As long as it is not explicit fraud or cooking the books,
| i.e. they are transparent about their methods.
|
| [4] Strictly this would be covered in the prospectus(S-1) few
| weeks before going public and that is first real look we get
| into the details.
| aurareturn wrote:
| They aren't reporting anything yet. What we hearing is just
| from news media who get their leaks/info from investors who
| get some form of IR reports/ presentation.
|
| The $24b figure is literally in OpenAI's announcement.
|
| The $19b ARR and $6b added in Feb came directly from
| Anthropic CEO recently.
| bandrami wrote:
| Announcing isn't reporting. Am I the only one old enough to
| remember Enron?
| SilverElfin wrote:
| Does the GAAP accounting matter if everyone passively buys
| shares due to the new fast entry rules, which corruptly will
| force us all to buy into these companies? The fundamentals
| and true value seem less relevant than ever:
|
| https://www.benzinga.com/markets/tech/26/03/51248353/michael.
| ..
| alvis wrote:
| With $122B what are you going to build next? Spaceships?
| topspin wrote:
| All the high performance RAM, frontier node wafer capacity,
| flash and disk drives on Earth. Also, all the gas turbines.
| Traubenfuchs wrote:
| Universal paperclips. And here I am asking ChatGPT which type
| of onion to use dor coq au vin.
| zozbot234 wrote:
| If they buy all the jet engines too (to turn them into gas
| turbines) they can be carbon neutral. More gas burned, but
| less jet fuel. It's a win-win.
| bigwheels wrote:
| Rather than advancing the state of the art, they'll use it to
| slow down competition by starving them of resources. In the
| style of a monopoly.
| paxys wrote:
| Nah, you'll get a few days worth of inference.
| cmiles8 wrote:
| This all smells fishy. They didn't "raise" $122B. Raise means
| someone put funds in your bank account and said send us the next
| quarterly report to tell us how our investment is doing.
|
| They have pieces from paper of folks saying they may put up funds
| or goods and services in that amount. But it's important to
| remember that:
|
| 1. While they are "raising" commitments others are backing out of
| deals (see Disney, various data center things). Big deals
| announced to major fanfare are falling through.
|
| 2. They slashed capital expenditure for the future after
| previously boasting about all the commitments. This is turning
| into bonkers math of X + Y - X + Z + W - 1/2 of Y = ? On trying
| to keep track of what's actually "raised / real" vs what was PR
| puffery that folks ran away from later.
|
| 3. Circular financing still seems to be going on. Big difference
| of here's cash, have fun and various "commitments" and balance
| sheet games that seem to still be going on.
|
| Net net this all still looks very scary and iffy at best.
| zitterbewegung wrote:
| Are we truly arguing semantics on HN which is a news aggregator
| for startups and everyone truly knows what a "raise" is and it
| is obviously not funds in your bank account? I don't disagree
| with the rest of your comment and the core thesis is valid that
| OpenAI is very much doing circular financing.
|
| Edit: A raise comes with stipulations on what you can use the
| money for. I don't know if I was being too mean about
| responding to a parent but before you comment just google what
| a raise has..
| sanex wrote:
| Other than funds in a bank account I do not know what it
| would mean.
| zitterbewegung wrote:
| Stipulations on what you can use the funds for.
| iAMkenough wrote:
| *hypothetical future funds
| fer wrote:
| Right because, what does even "buy" mean?
|
| https://thedeepdive.ca/openai-locked-up-40-of-global-ram-
| wit...
| zozbot234 wrote:
| So when my coworker tells me he got a "raise", they're not
| talking about money that will end up in their bank account?
| pier25 wrote:
| If OpenAI goes down their investors will lose any chance at
| getting their money back. They need to keep pretending things
| are going great for as long as possible.
| victorbuilds wrote:
| $122B in "committed capital" (read: pinky promises) for a company
| whose entire thesis is "scaling laws hold forever and nobody
| figures out efficiency." DeepSeek and Google already proved
| that's shaky. Twice.
|
| I ship code every day. I use Claude, I use GPT, I run llama
| locally. The gap between frontier models and what fits on a 4090
| shrinks every six months. Building a "super app" in response
| isn't vision -- it's panic. You don't consolidate into an
| everything-app when you're winning. You do it when your core
| product is commoditizing and you need to lock people in before
| they notice.
|
| Also love the electricity comparison. Electricity doesn't
| hallucinate, doesn't need $300B in cumulative funding to turn on
| the lights, and never told me a function exists that doesn't.
|
| Hope it works out. Competition is good. But "flywheel" is just VC
| for "trust me bro."
| nenadg wrote:
| Don't know why so many down votes for something that's clearly
| just another opinion
| winrid wrote:
| Probably because it reads a little like an LLM and also has
| an emdash
| aurareturn wrote:
| I've seen a lot of anti AI people use ChatGPT to write why
| AI bubble is about to pop.
|
| Ironic, isn't it?
| Jaskhy wrote:
| The title is incorrect. The $122B includes previous _promises_.
| They raised an additional $12B of _promises_ :
|
| "The round totaled $122 billion of committed capital, up from the
| $110 billion figure that the company announced in February.
| SoftBank co-led the round alongside other investors, including
| Andreessen Horowitz and D. E. Shaw Ventures, OpenAI said."
|
| This IPO, if anyone underwrites it, is going to fleece retail so
| hard. Better make it a SPAC with the help of Chamath and Cantor &
| Fitzgerald.
| ds2df wrote:
| Nah this raise (commitment) is... blah.
|
| Last announcement I reckon pre-IPO and the inevitable collapse.
| MinimalAction wrote:
| I hate to read this line when academics and graduate students who
| work in basic and hard sciences have their funding cut. The grand
| funding that pays minimum wage to grad students is a burden for
| this society, yet for a company that took all the valuable data
| from sources that never got credit, raises billions of dollars.
| Open says the name, but closed it is by operation. Sorry for this
| rant, but the priorities of this world suck.
| DrewADesign wrote:
| Or all of the people that they didn't ask, let alone
| compensate, that made all of the stuff they munged up for
| training data, so they could sell cheap knockoffs in the same
| markets.
| shafyy wrote:
| Looking forward to the movie about this absolute scammer Sam
| Altman when this is all said and done.
| BloodyIron wrote:
| Inflation is a hell of a drug.
| josefritzishere wrote:
| Thsi is the most blatant pump & dump scam I've ever seen. It's
| going to crash like a meteor.
| __alexs wrote:
| I thought they needed $7 trillion or they'd be unable to keep
| training new models?
| ekropotin wrote:
| Are we going to see a trillion dollar IPO?
| mrkramer wrote:
| Good luck competing with Google which has "unlimited" budget.
| mbgerring wrote:
| Each passing day the lie that markets efficiently allocate
| capital is further exposed
| jmward01 wrote:
| There is a lot of talk about the AI bubble. I think there are
| comparisons to the late 90's/early 00's here with early stars
| rising quickly but, ultimately, falling. Since essentially
| everything touches the internet now it is clear that the
| 'internet bubble' was more of a shakeup of companies than a real
| over-hype of the internet. That, I think, is at play right now
| too with the 'AI bubble'. AI isn't going away but some of the
| early stars may not make it.
|
| So, the real question here is: Is OpenAI Netscape, or are they
| Google?
| aurareturn wrote:
| I don't care if OpenAI is Netscape or Google.
|
| What I want to know is are we in 1994 of the AI bubble or 1999?
|
| Because even after the dotcom bubble popped, it was still much
| better than it was in 1994.
| bentt wrote:
| Intuitively, it just doesn't feel like OpenAI has a trillion
| dollar moat.
| outside1234 wrote:
| God help us if all of our retirement index funds are forced to
| buy this bankruptcy bomb.
| TheAlchemist wrote:
| "Commited capital" - is this the same commited as the $500B for
| the Stargate project ?
|
| Not gonna lie, I hate those announcements lately. It's full
| bullshit mode, worse than the Dot-com bubble. Numbers don't make
| any sense, any more, and yet journalist don't ask any real
| questions...
| jacquesm wrote:
| Fortunately, I was afraid that this was another bubble. /s
|
| I wonder what the bet is here, long term that valuation is going
| to have to go up even further for this investment to make sense
| so they're clearly betting that at IPO time they'll be able to
| convincingly demonstrate AGI or something extremely close to it.
| That's a pretty risky bet, and meanwhile, whatever they come up
| with will be a commodity within a year. And that's besides OpenAI
| no longer being seen as the dominant player _or_ the player with
| the best edge.
| outside1234 wrote:
| Google is totally going to run this company out of money aren't
| they?
| whalesalad wrote:
| This is so bad. OpenAI has already singlehandedly destroyed the
| global flash memory market with their war chest, this will just
| give them more power.
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